Earlier last week St. Paul shared the progress of its pilot project designed to lift families struggling with poverty. The guaranteed income program named the People’s Prosperity Pilot was introduced with much fanfare by the City and Mayor Melvin Carter when it was implemented in November 2020.
“It is really intended to push on federal policy and state policy, in particular, to look at how does this become part of the tool kit within our social safety net,” said Muneer Karcher-Ramos, St. Paul director of the Office of Financial Empowerment.
According to Karcher Ramos, every family in the project receives $500 monthly with no work requirement or strings attached. The aid is meant to supplement the existing social safety net money, not replace it, he said.
St. Paul is only the second U.S. city along with Stockton, Calif. to launch a guaranteed income program. Several other cities are said to be considering similar projects.
“In a country that works for all of us, no one who works full time should be stuck in poverty or worried about making ends meet,” Carter has said in explaining his motivation.
St. Paul is the only program in the nation that focuses on young families with newborns, Karcher-Ramos said. In fact, St. Paul used its infant college savings account program, “CollegeBound St. Paul,” to recruit families for the income program.
According to Karcher-Ramos, the overwhelming majority of participating families are BIPOC and all are either at or below the federal poverty guidelines.
Sixty-four of the families live in the two wards that make up most of St. Paul’s East Side; 29 live in the Fifth Ward, which includes the North End and Payne-Phalen; and 23 live in the First Ward, which includes Frog Town and Summit-University.
“The number of people we are reaching is incredible. The initial reports are really heartwarming,” said City Council President Amy Brendmoen, who represents the Fifth Ward.
Income guarantee programs have gained momentum this past year as scholars study the impact of direct payments as part of federal COVID-19 relief packages. “The idea of a guaranteed income is not that new,” explained Karcher Ramos, pointing out that it has a history dating back to Martin Luther King. “It is having its reawakening right now.”
He said data from the first pilot program in Stockton already show that families are using the additional money to buy groceries and pay for utilities and car repairs.
The program will cost $1.53 million, and the City has already distributed about $350,000. The City has secured the program’s funding through a variety of sources including the federal CARES Act, State funding and philanthropic dollars.
Kasey Wiedrich, St. Paul’s financial capability program manager, said participant families are still learning to fully trust the program. She said that for many, it initially sounded “too good to be true.”
Wiedrich said that in a year of uncertainty, some families said the guaranteed income gave them a little room in their budget to celebrate the holidays.